Merkel pushes ahead with party talks as coalition hurdles remain

German Chancellor Angela Merkel is pushing ahead with discussions on setting up her fourth-term government after all-night talks with potential coalition partners produced momentum while leaving key differences unresolved.

17.11.2017

German Chancellor Angela Merkel, also leader of the conservative Christian Democratic Union (CDU) party, gives a statement as she arrives for further exploratory talks with members of potential coalition parties to form a new government on November 16, 2017 in Berlin

(Bloomberg) German Chancellor Angela Merkel is pushing ahead with discussions on setting up her fourth-term government after all-night talks with potential coalition partners produced momentum while leaving key differences unresolved.

Seeking to avert a crisis that would threaten her fourth term, Merkel and her Christian Democratic-led bloc plan to resume talks with the Free Democrats and Green party at noon on Friday. After the chancellor had set initially an informal Thursday deadline to wrap up a month of exploratory talks and move forward to actual coalition negotiations, her party said several more days may now be needed.

"We’ve taken a lot of steps forward," Free Democratic Party head Christian Lindner told reporters after 15 hours of discussions in Berlin failed to produce a breakthrough. "We still have enough time left."

Discord over sharing risks in the euro area, cutting carbon emissions and limiting immigration have hamstrung Merkel, Europe’s longest-serving leader, who won a fourth term in September but is stuck with a caretaker government for now. Even a deal to move ahead now would be only an intermediate step, followed by detailed talks on a policy blueprint for the next four years.

As the discussions dragged through the night, Merkel pushed for a compromise to allow the start of formal negotiations to form a new government, taking aside individual leaders of other parties to try to craft a compromise. She didn’t comment on the substance of the talks as she left the meetings just before 5am local time.

Germany’s domestic conflicts, which reflect an increasingly splintered political landscape, are playing out on the global stage. Merkel has put euro-area policy on hold until there’s a new government. At a United Nations climate conference in Bonn this week, she flagged Green-led demands for curbing coal as a point of dispute in coalition talks.

German Chancellor and leader of the Christian Democratic Union (CDU) party, Angela Merkel (L) and Interior Minister of the State of Bavaria Joachim Herrmann are seen coming down a staircase duringa break in exploratory talks to form a new government on November 17, 2017

Hemming in the appetite for conflict on all sides is the risk of a repeat election if the talks collapse. Merkel’s bloc won in September with its lowest share of the vote since 1949, while the anti-immigration Alternative for Germany party, which campaigned against Merkel and the rest of the political establishment, entered parliament with 12.6%.

While negotiators narrowed differences on cutting carbon emissions, migration remained a major sticking point, according to two party officials who asked not to be identified. The key dispute on migration is over a moratorium on family members joining asylum seekers in Germany, which the Greens want to lift and Merkel’s Bavarian ally, the Christian Social Union, supports.

‘Very complicated’

While building a four-way coalition is "a very complicated task," Merkel on Thursday called on all sides to take responsibility for making it work.

This week’s goal is to list agreements and disputes in a way that allows all parties to sign off on starting formal coalition talks, which are expected to take weeks. If that hurdle is cleared, the next obstacle may be a convention by the Greens on Nov. 25 to vote on whether to proceed.

Should the talks fail, Merkel’s options will narrow. The Social Democrats, with whom she governed since 2013, say they aren’t interested in another alliance with her after the party fell to its worst electoral defeat since World War II. That would leave Merkel with two scenarios that postwar Germany hasn’t yet seen: a minority government or an election repeat.